OLDWICK, N.J., August 02, 2021--(BUSINESS WIRE)--AM Best affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of "a" (Excellent) of Transportation Property and Casualty Company Inc. (TPCC) (British Columbia, Canada) on July 30, 2021. The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect TPCC’s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, limited business profile, appropriate enterprise risk management and the lift afforded through its relationship with its ultimate parent, South Coast British Columbia Transportation Authority (TransLink).
The company continues to have a favorable level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), that is supported by retained earnings and a conservative investment portfolio. The rating also recognizes the volatility in underwriting performance, as well as the geographic and product concentration inherent in a captive business.
TPCC is a pure captive insurance company that provides automobile physical damage, general liability and property insurance coverage solely to TransLink. TPCC has demonstrated its usefulness and effectiveness to TransLink over many years by providing flexibility for insurance program structuring and substantial insurance cost efficiencies. TPCC is an integral part of TransLink's existing projects and future planning.
Factors that could lead to a downgrade of TPCC's ratings or a revised outlook include a reduced level of risk-adjusted capitalization that does not support the ratings or an increase in net retention. TPCC's ratings are enhanced by the credit assessment of TransLink; therefore, unfavorable operating performance or a material loss of capital at TransLink could result in changes to the captive's ratings. Alternatively, factors that could lead to a rating upgrade include TPCC sustaining favorable operating profitability while maintaining strong risk-adjusted capital levels.
AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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